A Treasury Bond Due in One Year Has a Yield

question 2

Multiple Choice

A treasury bond due in one year has a yield of 6.3% while a treasury bond due in 5 years has a yield of 8.8%.A bond due in 5 years issued by High Country Marketing Corporation has a yield of 9.6% while a bond due in one year issued by High Country Marketing Corporation has a yield of 6.8%.The default risk premiums on the one-year and 5-year bonds issued by High Country Marketing Corp.are respectively __________ and _________.

• A) 0.4%, 0.3%
• B) 0.4%, 0.5%
• C) 0.5%, 0.5%
• D) 0.5%, 0.8%

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Definitions:

Work in Process

Goods that are in the process of being manufactured but are not yet complete.

Part No.

A unique identifier assigned to a specific part or component within a manufacturing system or inventory.

Work in Process Inventory

Inventory that includes all materials, labor, and overhead costs for products in the manufacturing process but not yet completed.

Direct Materials Inventory

The stock of raw materials that will be directly used in the production of goods, readily available for the manufacturing process.